Massachusetts Court Rules Against Insurer in Bad Faith Case – Victory for Consumers

The Massachusetts Appeals Court recently ruled that Metropolitan Property and Casualty Insurance Company may have violated state law when it failed to make prompt payments on a no-fault claim. The ruling reversed a trial court decision, and remanded the matter to the trial court for further proceedings on the plaintiff’s claims against the insurance company for bad faith.

Importantly, the court stated that the emotional distress the plaintiff claims she suffered could be considered as part of her damages under the Consumer Protection Act, M.G.L. c. 93A. There is very limited authority in Massachusetts for emotional distress damages in claims under M.G.L. c. 93A.

The facts of the case were straightforward. Ms. Chery was injured in a car accident and obtained medical treatment. Metropolitan was responsible for personal injury protection (PIP) benefits, but failed to pay the bills within thirty days, as required by M.G.L. c. 90, Sec. 34M. The plaintiff filed suit, claiming violations of c. 90, c. 93A, and c. 176D, which governs claims and settlements. The insurance company eventually paid the bills, then claimed it could not be liable for its bad faith claims handling. The District Court judge agreed and plaintiff appealed.

The Appeals Court agreed that the claimant had no further right under the insurance contact itself, as the bills had been paid. However, the court found that there was evidence of bad faith, and the simple payment of the bills did not cure the harm caused by the delay. Among other things, the plaintiff had to file suit, incur litigation expenses, and suffer the unreasonable delay. The plaintiff also claimed that she suffered emotional distress, as her bills were put into collection, and she worried about her credit being affected. The court specifically ruled that the emotional distress damages, even though not readily quantifiable, may be considered compensable under Massachusetts law.

The case was a victory for Massachusetts consumers.

The case is Chery v. Metropolitan Property and Casualty Insurance Company, Massachusetts Appeals Court No. 10-P-103 (June 16, 2011).

We Help Consumers Who Have Been Injured by the Bad Faith of Insurance Companies

Our firm has a long history of helping consumers with claims against Massachusetts insurance companies for bad faith settlement practices. Massachusetts law can be quite favorable for consumers when an insurance company fails to settle a case when liability is reasonably clear. The court may award up to triple damages, depending on the circumstances of the case.

Please feel free to contact us if you have any questions about claims against insurance companies. Our toll free number is 800 379 1244.

Massachusetts Appeals Court Just Says “NO” to Greedy Insurance Company

The Massachusetts Appeals Court just said NO today to a greedy insurance company, OneBeacon Insurance, which tried to collect an extra several hundred thousands of dollars as reimbursement for an insurance claim. The case was a victory for Massachusetts consumers in general, and for one family in particular who recovered a treasured family heirloom.

The case centered on a family portrait which had been painted in Italy in 1765. The portrait was of family ancestors and was painted by an artist whose works had appreciated in value significantly in the last thirty years.

Unfortunately, this family portrait was one of several items stolen from the family home in 1975. The family had a total of $32,500 in insurance to cover the loss (the loss was much greater). The painting itself had recently been appraised at $25,000. The insurance company (which was a predecessor to OneBeacon) paid the policy limits.

Fortunately, the painting was recovered in 2007. But unfortunately, OneBeacon Insurance Company claimed it owned the work of art, which had increased in value to between $400,000 and $800,000. The family offered to reimburse OneBeacon for the payment of $25,000, but the insurance company refused to settle.

The Massachusetts courts had little regard for the insurance company’s avarice. The Superior Court and the Appeals Court both ruled that the insurer’s “subrogation” right ended with reimbursement; that the contract had no ambiguity whether the family should receive the art if they made the reimbursement; and that the insurance company had no basis for its insurance claim for compound interest on the payment for the claim.

The family portrait has now been returned to its rightful owner.

Massachusetts legal and insurance expert David White said, “This was a clear example of an insurance company attempting to overreach. They had no regard for this family or even their own insurance contract.”

So score this legal battle: Massachusetts Consumers 2, Greedy Insurance Company 0.

The name of the case is Apthorp v. OneBeacon Insurance Group, LLC, Massachusetts Appeals Court No. 09-P-1258 (October 18, 2010)

Some practical consumer advice: If you are a homeowner, make sure you are fully insured for any property loss. You can sometimes actually save money by having valuables, such as jewelry or art, appraised and scheduled separately on the homeowner’s insurance policy. Make sure your home and personal property are fully protected in case of fire, theft, or other loss.
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